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Contractual relations, foreign direct investment, and technology transfer: The case of China
Author(s) -
Leung H. M.,
Thoburn John T.,
Chau Esther,
Tang S. H.
Publication year - 1991
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.4010030307
Subject(s) - opportunism , scope (computer science) , china , corporate governance , foreign direct investment , business , industrial organization , technology transfer , market economy , economics , economic system , international trade , finance , political science , law , computer science , macroeconomics , programming language
Abstract This paper discusses in terms of transactions costs how foreign investors choose contractual forms. It argues that the unusually wide choice of contracts available in China can be shown roughly to correspond to varying degrees of within‐firm governance. Other factors, particularly locational choice within China, contribute to reducing the scope for opportunism on the part of the host country where a well‐enforced legal framework is lacking. Technology transfer is rendered more complex by the importance of team organization in the technology on offer from firms from Hong Kong, the largest foreign investor.